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Why are African citizens leaving their countries ? Xenophobia – Mediterranean Sea – Killing in Libya… April 30, 2015

Posted by OromianEconomist in Africa, Amnesty International's Report: Because I Am Oromo, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Ethnic Cleansing, Groups at risk of arbitrary arrest in Oromia: Amnesty International Report, Human Rights Watch on Human Rights Violations Against Oromo People by TPLF Ethiopia, Janjaweed Style Liyu Police of Ethiopia, Jen & Josh (Ijoollee Amboo), Nimoona Xilahuun Imaanaa, The 2014 Ibrahim Index of African Governance, The Mass Massacre & Imprisonment of ORA Orphans, The Tyranny of TPLF Ethiopia.
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OEthiopia is the one of the lowest in social Progress 2015Oromo refugees in Yemen

When we are condemning J-Zuma and his fellow Zwelithini‘s statement, we must not skip the fundamental question of “why are citizens running away from their countries in Africa? Why Zimbabweans, Nigerian, Mozambicans etc. are so many in South Africa? What Malian, Senegalese, Eritreans… are doing on the Mediterranean Sea? What Ethiopian, Eritreans… are looking for in Libya on their way to cross the sea? And Why African Leaders and institutions are silence on these questions? Close to 2000 migrants died crossing the Mediterranean to Europe this year only, many times more than during the same period in 2014…

Many in our continent, many of our leaders and institutions know the answers to these questions. Unfortunately, there are no actions being taken to resolve them; there are not even any honest acknowledgements of the problem; rather we are served with empty diplomatic statements everyday with no decisive action for change. We are turning around and the situation is getting worse.

https://oromianeconomist.wordpress.com/2015/04/28/if-ethiopias-economy-is-so-vibrant-why-are-young-people-leaving/

assodesire

President Jacob Zuma, reacting to criticisms from African countries over the xenophobic violence against foreigners in South Africa recently declared: “Why are their citizens not in their countries? Why are they in South Africa? This is an unacceptable statement from a leader of a big country, and made in a very wrong time. We all know that the xenophobic violence started last month after the Zulu King, Goodwill Zwelithini said that “foreigners should pack their belongings and leave the country”.

In that context, President Zuma’s declaration this week is a dangerous move that can be understood by those South African involved in the violence as a justification of their evil actions… This is really unfortunate especially as it is coming from an African Union member that is investing and doing business in most of African countries.

Wrong timing again because South Africa is due to host the 25th

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If Ethiopia’s economy is so vibrant, why are young people leaving? April 28, 2015

Posted by OromianEconomist in Africa, Africa Rising, Ethiopia the least competitive in the Global Competitiveness Index, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, The 2014 Ibrahim Index of African Governance, The extents and dimensions of poverty in Ethiopia, The State of Food Insecurity in Ethiopia, The Tyranny of TPLF Ethiopia.
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OjimmaEthiopia is the one of the lowest in social Progress 2015

If Ethiopia is so vibrant, why are young people leaving?

Al Jazeera

April 28, 2015

Within a week, Ethiopians were hit with a quadruple whammy. On April 19, the Libyan branch of the Islamic State in Iraq and the Levant (ISIL) released a shocking video purporting to show the killings and beheadings of Ethiopian Christians attempting to cross to Europe through Libya. This came only days after an anti-immigrant mob in South Africa killed at least three Ethiopian immigrants and wounded many others. Al Jazeera America reported that thousands of Ethiopian nationals were stranded in war-torn Yemen. And in the town of Robe in Oromia and its surroundings alone, scores of people were reportedly grieving over the loss of family members at sea aboard a fateful Europe-bound boat that sank April 19 off the coast of Libya with close to 900 aboard.

These tragedies may have temporarily united Ethiopians of all faiths and ethnic backgrounds. But they have also raised questions about what kind of desperation drove these migrants to leave their country and risk journeys through sun-scorched deserts and via chancy boats.

The crisis comes at a time when Ethiopia’s economic transformation in the last decade is being hailed as nothing short of a miracle, with some comparing it to the feat achieved by the Asian “tigers” in the 1970s. Why would thousands of young men and women flee their country, whose economy is the fastest growing in Africa andwhose democracy is supposedly blossoming? And when will the exodus end?

After the spate of sad news, government spokesman Redwan Hussein said the tragedy “will be a warning to people who wish to risk and travel to Europe through the dangerous route.” Warned or not, many youths simply do not see their dreams for a better life realized in Ethiopia. Observers cite massive poverty, rising costs of living, fast-climbing youth unemployment, lack of economic opportunities for the less politically connected, the economy’s overreliance on the service sector and the requirement of party membership as a condition for employment as the drivers behind the exodus.

A 2012 study by the London-based International Growth Center noted (PDF) widespread urban unemployment amid growing youth landlessness and insignificant job creation in rural areas. “There have been significant increases in educational attainment. However, there has not been as much job creation to provide employment opportunities to the newly educated job seekers,” the report said.

One of the few ISIL victims identified thus far was expelled from Saudi Arabia in 2013. (Saudi deported more than 100,000 Ethiopian domestic workers during a visa crackdown.) A friend, who worked as a technician for the state-run Ethiopian Electricity Agency, joined him on this fateful trek to Libya. At least a handful of the victims who have been identified thus far were said to be college graduates.

Given the depth of poverty, Ethiopia’s much-celebrated economic growth is nowhere close to accommodating the country’s young and expanding population, one of the largest youth cohorts in Africa. Government remainsthe main employer in Ethiopia after agriculture and commerce. However, as Human Rights Watch noted in 2011, “access to seeds, fertilizers, tools and loans … public sector jobs, educational opportunities and even food assistance” is often contingent on support for the ruling party.

Still, unemployment and lack of economic opportunities are not the only reasons for the excessive outward migration. These conditions are compounded by the fact that youths, ever more censored and denied access to the Internet and alternative sources of information, simply do not trust the government enough to heed Hussein’s warnings. Furthermore, the vast majority of Ethiopian migrants are political refugees fleeing persecution. There are nearly 7,000 registered Ethiopian refugees in Yemen, Kenya has more than 20,000, and Egypt and Somalia have nearly 3,000 each, according to the United Nations refugee agency.

As long as Ethiopia focuses on security, the door is left wide open for further exodus and potential social unrest from an increasingly despondent populace.

Ethiopians will head to the polls in a few weeks. Typically, elections are occasions to make important choices and vent anger at the incumbent. But on May 24, Ethiopians will be able to do neither. In the last decade, authorities have systematically closed the political space through a series of anti-terrorism, press and civil society laws. Ethiopia’s ruling party, now in power for close to 24 years, won the last four elections. The government has systematically weakened the opposition and does not tolerate any form of dissent.

The heightened crackdown on freedom of expression has earned Ethiopia the distinction of being the world’sfourth-most-censored country and the second leading jailer of journalists in Africa, behind only its archrival, Eritrea, according to the Committee to Protect Journalists.

There is little hope that the 2015 elections would be fundamentally different from the 2010 polls, in which the ruling party won all but two of the 547 seats in the rubber-stamp national parliament. The ruling party maintains a monopoly over the media. Authorities have shown little interest in opening up the political space for a more robust electoral contest. This was exemplified by the exclusion of key opposition parties from the race, continuing repression of those running and Leenco Lata’s recent failed attempt to return home to pursue peaceful political struggle after two decades of exile. (Lata is the founder of the outlawed Oromo Liberation Front, fighting since 1973 for the rights of the Oromo, Ethiopia’s marginalized majority population, and the president of the Oromo Democratic Front.)

A few faces from the fragmented and embittered opposition maybe elected to parliament in next month’s lackluster elections. But far from healing Ethiopia’s gashing wounds, the vote is likely to ratchet up tensions. In fact, a sea of youth, many too young to vote, breaking police barriers to join opposition rallies bespeaks not of a country ready for elections but one ripe for a revolution with unpredictable consequences.

Despite these mounting challenges, Ethiopia’s relative stability — compared with its deeply troubled neighbors Somalia, South Sudan, Eritrea and Djibouti — is beyond contention. Even looking further afield, across the Red Sea, where Yemen is unraveling, one finds few examples of relative stability. This dynamic and Ethiopia’s role in the “war on terrorism” explains Washington’s and other donors’ failure to push Ethiopia toward political liberalization.

However, Ethiopia’s modicum of stability is illusory and bought at a hefty price: erosion of political freedoms, gross human rights violations and ever-growing discontent. This bodes ill for a country split by religious, ethnic and political cleavages. While at loggerheads with each other, Ethiopia’s two largest ethnic groups — the Oromo (40 percent) and the Amhara (30 percent) — are increasingly incensed by continuing domination by Tigreans (6 percent).

Ethiopian Muslims (a third of the country’s population of 94 million) have been staging protests throughout the country since 2011. Christian-Muslim relations, historically cordial, are being tested by religious-inspired violence and religious revivalism around the world. Ethiopia faces rising pressures to choose among three paths fraught with risks: the distasteful status quo; increased devolution of power, which risks balkanization; and more centralization, which promises even further resistance and turmoil.

It is unlikely that the soul searching from recent tragedies will prompt the authorities to make a course adjustment. If the country’s history of missed opportunities for all-inclusive political and economic transformation is any guide, Ethiopians might be in for a spate of more sad news. As long as the answer to these questions focuses on security, the door is left wide open for further exodus and potential social unrest from an increasingly despondent populace.

*Hassen Hussein is an assistant professor at St. Mary’s University of Minnesota.

http://america.aljazeera.com/opinions/2015/4/if-ethiopia-is-so-vibrant-why-are-young-people-leaving.html

Ethiopia is one of 10 least connected in the digital world in mobile phone and internet use. #Africa November 27, 2014

Posted by OromianEconomist in 25 killer Websites that make you cleverer, Africa, African Internet Censorship, Ethiopia & World Press Index 2014, Facebook and Africa, Free development vs authoritarian model, Groups at risk of arbitrary arrest in Oromia: Amnesty International Report, The 2014 Ibrahim Index of African Governance, The Colonizing Structure & The Development Problems of Oromia, The Global Innovation Index, The Tyranny of Ethiopia, The Tyranny of TPLF Ethiopia, Tweets and Africa.
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OEthiopiadisconnected

 

Denmark, Korea And Sweden are the world’s most digitally connected countries while Ethiopia is one of 10 least connected

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November 26, 2014 (The Telegraph) — Denmark has been named the world’s “most connected” country based on mobile phone and internet use.

Scandinavia dominated this year’s rankings, with Sweden in third place, followed by Iceland in fourth, Norway sixth and Finland eighth. Britain came fifth.

They were compiled as part of a report by the International Telecommunication Union – theInformation and Communication Technology Development Index (IDI), which rates 166 countries according to their level of access to, use of and skills in using information and communication technology.

Hong Kong was the ninth most connected country, coming in ahead of Japan in 11th place, while Luxembourg completed the top 10.

Other countries in the top 30 included the US (which ranked 14th), Australia, Switzerland, Singapore, Germany, France, New Zealand, Estonia and Macau, as well the principalities of Andorra and Monaco.

The 10 least connected countries were all in Africa, with the Central African Republic being the worst, followed by Niger, Chad, Eritrea and Ethiopia.

All countries were shown to have improved their IDI values in the last year, while the nations with the “most dynamic” improvement in ranking included the United Arab Emirates, Fiji, Cape Verde, Thailand, Oman, Qatar, Belarus, Bosnia & Herzegovina and Georgia. Improvements were said to have been driven mostly by better wireless broadband connection.

Europe proved to be the most connected region, scooping up eight of the top 10 rankings, while Africa had the lowest regional ranking. The continent, however, did show a mobile broadband growth rate of more than 40 per cent in 2014 on last year.

Nearly three billion people globally will be using the internet by the end of this year, up by nearly 40 per cent on last year. But 450 million people still don’t live within reach of a mobile signal, while 4.3 billion people are not connected to the internet – with 90 per cent of those living in developing countries, the report said.

Earlier this year, Telegraph Travel’s technology expert Donald Strachan outlined the “world’s Wi-Fi-friendliest cities”, featuring various countries from the top 40 of this year’s IDI report.

Connecting in the Finnish capital of Helsinki is password-free and easy thanks to a network of hotspots in public buildings, civic squares and even on some buses and trams around the city.

Hong Kong, “one of the world’s most futuristic cities”, was said to be generous with free internet access in public areas. There are several free Wi-Fi networks, the key ones being GovWiFi (at parks, libraries, public buildings, ferry terminals and more) and MTR WiFi, which provides 15 minutes of free Wi-Fi per device up to five times every day at MTR stations.

Taipei offers 30 days of free access to a national, government-backed network of over 5,000 hotpsots. Hundreds of these free iTaiwan hotspots are available throughout the Taiwanese capital.

Macau was noted for its WiFiGo service which offers free internet for visitors every day between 8am and 1am. The network has around 150 hotspots, meaning there’s usually Wi-Fi close by, including at ports, museums and tourist information centres.

Other major cities with free public Wi-Fi access include New York, Paris and Perth, Australia, as well as Florence and Tel Aviv, which has eighty hotspots dotted around its centre.

Access to free Wi-Fi has been an increasingly important factor for travellers around the world, especially when booking a hotel. Britain’s hotels were found to be among the worst in Europe for free Wi-Fi access, while the two best performing cities were both Swedish – Malmö and Gothenburg, where 98 per cent and 96 per cent of hotels were found to offer free Wi-Fi, a survey by the travel search engine KAYAK earlier this year revealed.

A new website aiming to help travellers in the search for free and fast wireless internet access was introduced earlier this year.Hotewifitest.com lets hotel guests test the speed of their internet connection, and then stores the results for others to view. It also records whether the Wi-Fi is free or comes at a price.

Several airports around the world also offer free Wi-Fi services, with Dallas-Forth Worth in Texas being among the best, providing free Wi-Fi in all five of its terminals since 2012. Since upgrading its former paid network, the number of daily Wi-Fi connections has risen from 2,000 to 55,000. Helsinki Airport, Singapore’s Changi Airport, Seoul’s Incheon Airport and Amsterdam Schiphol complete the world’s top five for airport Wi-Fi quality.

Earlier this year, Britain’s biggest airports have been criticised for failing to provide passengers with unlimited Wi-Fi access.

None of Britain’s six busiest airports – Heathrow, Gatwick, Manchester, Stansted, Edinburgh and Luton – offer unlimited free internet access, according to a study by Skyscanner, the flight comparison website.

Source: The Telegraph

http://www.traveller.com.au/denmark-korea-sweden-the-worlds-most-connected-country-11uwmr

 

 

 

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Africa’s middle-class and income statistics are questionable November 5, 2014

Posted by OromianEconomist in Africa Rising, Aid to Africa, Corruption in Africa, The 2014 Ibrahim Index of African Governance.
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Africa’s middle class: until data collection and analysis used to measure income distribution improve, the continent’s statistics are unreliable.

by Morten Jerven, 1st  November 2014 @  Good Governance Africa

On September 30th Kenya announced that it had revised its GDP upwards by 25%. Earlier this year Nigeria’s National Bureau of Statistics made an even bigger splash when a similar exercise showed the Nigerian economy to be 89% bigger than previously thought, displacing South Africa’s as the continent’s largest economy.
In 2011 the African Development Bank (ADB) declared that not only was Africa rising, but that statistics on income distribution revealed a sizeable middle class now comprising 34% of Africa’s population—or nearly 327m people. Earlier that year, The Economist announced that IMF forecasts predicted that seven of the ten fastest-growing economies in the world over the next five years would be in Africa. In 2010 Ghana revised its GDP by 63%.
These statistical earthquakes, while good news, have shattered trust in Africa’s numbers. Shanta Devarajan, chief economist of the World Bank’s Africa region, called it “Africa’s statistical tragedy” when he reflected on the quality and availability of quantitative evidence in the aftermath of Ghana’s GDP revision.

In retrospect it may seem puzzling that bewilderment has greeted what has essentially been good news – Africa’s economies and its middle class are bigger than we thought. But, for too long, we have neglected the accuracy of African economic statistics. We are only now waking up to the size of the knowledge gap because suddenly the numbers on African economies matter.

Investors and social scientists rely on accurate measurements. If 327m middle-class Africans really existed, investors would consider Africa a potentially lucrative market for making deals in real estate,retail, wholesale and communications. These huge numbers would force social science scholars to redefine and jettison hackneyed development phrases such as “subsistence”, “informal economies”, “food security” and “poverty eradication”.

However, the AfDB’s 2011 report conceded that about 60% of Africa’s middle class, approximately 199m people, were barely out of poverty. This startling admission was based on its expansive definition of the middle class: individuals who spend between US$2 and $20 daily.

For political scientists, the middle class is the backbone of a democratic society. In Marxist theory the rise of the bourgeoisie permits progressive modernisation and industrialisation. For investment banks, multinational corporations, real estate developers and traders, the middle class is defined by purchasing power and signifies a potentially untapped market.

For this reason, a more accurate definition of the middle class requires a higher purchasing-power bracket that shows that households are living beyond subsistence and that its members are also high school and university graduates.

Researchers affiliated with international organisations and investment banks have also tried counting Africa’s middle class. Some surveys, such as accounting firm EY’s 2012 Africa by numbers report, dance around the actual size, and prefer instead to refer to “a growing middle class”. Similarly, The rise of the African consumer, a 2012 report from McKinsey, a consulting and research company, stays out of the numbers game altogether and never mentions the middle class. Standard Bank released a report in June assessing 11 sub-Saharan economies, or half this region’s total GDP, to measure the size of the continent’s middle class.

Based on these reports, the size of Africa’s middle class stretches from as few as 15.7m households, as estimated by McKinsey, to the 327m people the AfDB assessed in 2010. Completely different monetary definitions of the middle class drive these differences. The AfDB’s bottom threshold of $2 per day is much lower than McKinsey’s $55, Standard Bank’s $23 or the $10 per day used by the OECD, a Paris-based intergovernmental think-tank. In addition, the OECD and AfDB report their statistics in total number of people, while McKinsey and Standard Bank report on households without specifying their size.

It may appear puzzling that Standard Bank defines the middle class as households that spend between $8,500 and $42,000, while McKinsey’s 2010 Lions on the move report defines this group as households that spend above $20,000 a year. This can be reconciled: McKinsey includes all households above $20,000 in disposable income. This means that they also count very rich households, which explains why their estimate is higher.

In its other report, The rise of the African consumer, McKinsey contends that 40% of spending-power growth will come from households that earn above $20,000 annually. They note that “this group currently accounts for just 1-2% of total households” but that this income cluster is “growing faster than the overall average, both in numbers and in average income”.

So what are we left with? We went from a middle class that represents 34% of Africa’s population to one that represents 1-2%. But this tiny group is not middle class: they are very rich households that have the fastest-growing incomes. Ultimately, what we are seeing is not a pyramid bulging in the middle as in the picture drawn by the AfDB. The numbers from McKinsey and Standard Bank describe a society where the top spenders are getting richer. This may be good news for some banks and investors, but it does not carry the same connotations for social scientists.

None of the above, however, explains how these numbers were calculated or whether they are trustworthy. It is highly likely that many of the GDP growth numbers exaggerate actual increases in productivity and improvements in living standards.

Both Ghana’s and Nigeria’s GDP ballooned following the introduction of new benchmark years for estimating GDP in 2010 and 2014. How confident can one be about a 7% growth rate in a country likeNigeria when almost half of the economy was missing in the official baseline?

Some commentators proclaim that Africa is growing faster than its outdated measurements suggest. Indeed, some countries’ economies are larger than those shown by these old numbers. But that does not mean that recent growth has been faster too. The opposite is likely.

An outdated baseline means that “new” growth is more than likely “previously unrecorded” growth. When the base is too small, the proportion of economic growth will be overstated. Moreover, when statisticians and politicians know that their numbers are minimising total GDP, it is tempting to add a bit each year to pre-empt a large upwards revision when the GDP numbers are ultimately corrected.

GDP growth estimates are also misleading because only parts of the economy are recorded. Changes in exports and foreign direct investment are quantifiable and easily measured, while other important sectors that may be moving less quickly, such as food production, often remain unobserved.

In developed countries, like Norway, individuals’ and companies’ income, production and expenditure are reasonably well recorded and available through administrative records. The government routinely collects this information as part of its day-to-day operations.

In poorer countries, few companies and even fewer individuals, households and farms record or report income, production and expenditure. To get a measure of how income is distributed in a country and how many people earn less than $2 a day requires drawing a graph with income on the X-axis and population on the Y-axis. On such a graph the share of households that earn below $2, $3 or $4 a day can be seen, as well as the income ratio of the top 1% and bottom 10%.

Drawing this graph presumes this information is reliable. In practice, however, these numbers are mostly non-existent because data collection is expensive and time consuming. The most common audit, the Living Standards Measurement Study, is used by the World Bank to obtain poverty statistics. It requires each household to spend a day filling out a long questionnaire. A typical survey with a sample of about 2,000 households costs a few million dollars. From data collection to dissemination takes another two years.

According to a May 2013 report by the Brookings Institution, a Washington, DC-based think-tank, six of sub-Saharan Africa’s 49 countries have never conducted a household survey and only 28 countries have done one in the past seven years. Surveys measuring social indicators such as health and demographics have similar gaps. Moreover, only about 60 countries in the world have vital registration systems required to monitor trends in social indicators, and none of these are in Africa, according to an article by Amanda Glassman, a senior fellow at the Washington, DC-based think-tank Center for Global Development. Any statement about the size and direction of poverty and income in the world, particularly in Africa, relies on many assumptions and extrapolations, a practice that can lead to gross inaccuracies.

Reports on the size of Africa’s middle class highlight these presumptions and (mis)calculations. The Standard Bank report, which provides a conservative estimate of the size of the middle class, is based on a sample of 11 sub-Saharan African countries. The problem is that data availability is not random – it is biased because we know more about the richer economies, such as Nigeria and Ghana, than we know about poorer, more problematic countries such as the Democratic Republic of Congo, Somalia or Côte d’Ivoire. Another complication is that we do not know how Standard Bank determined middle-class growth rates for years that lack official information on income distribution, nor how it dealt with the very well-known discrepancies and incoherencies in Nigeria’s household surveys.

It is undeniable that more goods are leaving and entering the African continent today than 15 years ago. But does the increase in the volume of transactions result in a sustained lift in living standards? Some might argue that a positive African narrative and the power of self-fulfilling prophecies can make the vision of a huge middle class in Africa come true.

A fact-based outlook, however, is the best path. Does Africa’s population really have more spending power? Are fewer Africans hungry?

The evidence on income distribution does not provide accurate answers. Everyone wants to know if the continent is better off, but proclaiming that it is without solid proof may backfire – particularly if poverty reduction and income distribution are slower and more unequal than what has been publicised. Impartial and inaccurate numbers too often lead to poor policy decisions.

 

Read more @ http://gga.org/stories/editions/aif-28-making-up-the-middle/who2019s-counting

Draining development: illicit flows from Africa October 21, 2014

Posted by OromianEconomist in Africa, Africa and debt, Africa Rising, Aid to Africa, Corruption, Corruption in Africa, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Illicit financial outflows from Ethiopia, The 2014 Ibrahim Index of African Governance, UK Aid Should Respect Rights, Youth Unemployment.
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Draining development: illicit flows from Africa

Since 1970, Africa has lost at least $854 billion through capital flight which is not only enough to wipe out the continent’s total external debt of $250 billion but leaving around $600 billion for poverty alleviation.

By Menelaos Agaloglou

corruption-empireOctober 21, 2014 (Open Democracy) — Illicit flows are difficult to measure due to lack of reliable data. Global Financial Integrity in 2008 reported that Africa has lost between $854 billion and $1.8 trillion in the last four decades.

The flows seeking higher returns are directed towards western financial institutions and the process is being facilitated by tax havens, trade mispricing (by overpricing imports and underpinning exports on customs documents, residents can illegally transfer money abroad), fake foundations and money-laundering techniques.

Sometimes it is a response to economic and political instability or to high taxes placed on international trade. Frequently it is a way of hiding the illegal accumulation of wealth owed to corruption or criminal activity. Additionally, massive illicit flows can also be a reaction to a defaulting government debt or to a lost confidence on the economic strength of the country.

These outflows of capital seriously harm the efforts for poverty alleviation and socio-economic development. In the first place, investment has decreased, yielding negative implications for job creation, improvement of infrastructure and industrialization.

Illicit flows of money harm economic growth by stifling private capital formation and causing the tax base to remain narrow. Since it drains hard currency reserves, it encourages poor countries to borrow money from abroad making their debt crisis worse and curtailing public investment further. This burden is paid more by the poor since high levels of unemployment and increased inflation affects them more. Illicit flows increase inequality that can lead to political tensions and further poverty.

Interestingly, Africa has become a net creditor to the world despite its global image as an inactive recipient of aid and loans. It has the highest share of private external assets among developing regions. Since 1970, Africa has lost at least $854 billion through capital flight which is not only enough to wipe out the continent’s total external debt of $250 billion but leaving around $600 billion for poverty alleviation and pro poor growth.

Africa is the largest recipient of aid in the world. Vast amount of resources are being spent every year with the task of achieving poverty reduction and meeting the Millennium Development Goals.

But what’s the point of sending money in the region if the region sends it back? For the region as a whole, illicit outflows outpaced official development assistance by a ratio of around 2:1. Taking other statistics into account, developing countries lose at least $10 through illegal flight for every $1 they receive via the aid regime. It is logical to conclude here that it would have been more beneficial to keep the locally produced wealth and invest it in the continent rather than waiting for aid from abroad to safeguard basic needs.

A serious inquiry that needs further investigation is what exactly this amount (between $1 trillion and $2 trillion) being lost means in terms of schools, hospitals and infrastructure. For example, the Education For All 2011 report stated that current aid levels fall short of the $16 billion required annually to close the external financing gap in low-income countries.

This crime kills the economic chances of the region. In 1970 it sent abroad 2% of Africa’s GDP, in 1987 it sent abroad 11% and 8% of its 2007 GDP. Illicit outflows from Africa grew at an average 12% a year over the four decades. To have a chance to meet the Millennium Development Goals, African countries must attack the illicit outflow and try to recover what is now held abroad. If the amount lost could be returned, then development can be achieved painlessly with local resources finally putting an end to aid dependency.

Economic growth without reform that can keep the wealth locally reinvested will lead to more illicit capital flight, and not to less. Sub Saharan Africa had high growth-rates over the last decade. Illicit outflows have also increased during this period. If the resources gained from growth cannot be invested locally then pro poor growth will not be achieved and the continent will continue suffering from extreme poverty. The region crucially needs diversification of its economy, research and development in relation to its agriculture and an expansion of its social services both in urban and rural areas. Only locally-led efforts, with local resources, can succeed in bringing prosperity.

Former South African president Mbeki blamed multinational companies for the flow of capital out of Africa, whereas other people are blaming the growing African elite for wanting higher returns for their money. The alternative view is that this economic problem of the outflow of money is just one of the consequences of the real problem that generates all others: in many African countries, governments (even the whole apparatus of the state) lack legitimacy, and their policies and actions do not represent the whole of society but special groups with economic and political power. In most African countries there is no bargain among groups; just the imposition of power by a small elite.

An effective state can tax its citizens with a political settlement, a rational consensus between state and citizens whereby taxes will be used to further guarantee and protect their interests. At this point we can start perceiving the problem of illicit flows more as a political problem and less an economic one. It is necessary for African societies to address their weak state legitimacy by becoming more open political units, which will integrate the different groups from the societies they supposedly lead. On the other hand businessmen, in order to keep their wealth inside their countries, need to be sure that they will profit with a positive real rate of interest. Serious macroeconomic policies, such as lower fiscal deficits, low inflation and reduced monetary expansion need to follow.

In conclusion, capital flight places the whole burden of solving the problem upon African countries. However one views the problem, either as an economic or a political one, the burden is placed on these societies to solve problems through their own efforts.

It is true that African financial institutions are the smallest and least developed in the world. It is also true that they are not transparent – probably a symptom of their connection with the political establishment which also lacks credibility among the locals. But credibility, transparency and legitimacy are central ideas to development. It would be wiser to start our development discussions from these basics rather than wasting more resources and time setting more and more millennium goals.

About the author

Menelaos Agaloglou is the Head of Geography in the International Division of the Greek Community School in Addis Ababa. He is a researcher of the Center of Middle Eastern and Islamic Studies (CEMMIS), part of the University of Peloponnese in Greece. He has taught Conflict Resolution and English in the University of Hargeisa in Somalia and Social Studies at the Ahmadiyya elementary school in Sierra Leone.

Read @ Open Democracy     http://ayyaantuu.com/horn-of-africa-news/draining-development-illicit-flows-from-africa/

 

The Four Types of Africa’s Corrupt Power Elites: How to be Corrupt in Africa October 10, 2014

Posted by OromianEconomist in Africa, Africa Rising, Colonizing Structure, Corruption in Africa, Illicit financial outflows from Ethiopia, Land and Water Grabs in Oromia, Land Grabs in Africa, The 2014 Ibrahim Index of African Governance, The Colonizing Structure & The Development Problems of Oromia, The Tyranny of Ethiopia, Undemocratic governance in Africa, US-Africa Summit, Youth Unemployment.
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 (picture: TPLF/Ethiopia’s corruption Empire)

 

 

 

 

 

SHAPE OF THE CONTINENT: How to be, or not to be, corrupt in Africa where one size does not fit all

Christin Mungai, Mail & Guardian Africa

 

 

 

 

SOUTH Africa is awash with stories of corruption scandals touching on key public figures; from President Jacob Zuma on one end, to opposition leader Julius Malema on the other.

All is not well in Africa’s richest economy. However, recent reports paint an even bleaker picture for the continent in general. One noted that “acording to most of the available indicators, the war on corruption is at a standstill. In fact, these indicators show that corruption is actually increasing in countries where its impact is likely to be most harsh”.

How bad is it and, most importantly, WHY does it happen? We think a large part of it is down to the nature of the various states in Africa.

We took the scores of African countries in two indicators from the latest Fragile States index compiled by Foreign Policy: factionalised elites and state legitimacy. The former measures conflict and competition among local and national leaders, while the latter measures corruption and other measures of government performance and electoral process.

We plotted each country’s deviation from the mean on the two indicators, and the resulting scatter diagram suggests intriguing things about African states; especially how much is “up for grabs”, but more importantly, how the corrupt are corrupt – the strategies which would work if you were looking to loot public coffers.

 

 

See infographics @ https://magic.piktochart.com/embed/3030773-untitled-infographic

 

The Ones who Share Nicely

In the top right quadrant are the “democracy star-performers” – Mauritius, Botswana and Namibia are the far outliers, as well as countries like Ghana, South Africa, Lesotho, Tanzania, Benin and Senegal (mouse over the coloured dots to see specific countries). The countries in this have low competition among elites, and a high level of state legitimacy: citizens feel they have a stake in the country, their votes matter and they can hold leaders accountable.

On the surface, it seems that these countries have mature democratic processes and are committed to the rule of law. But it might also suggest something else – that where corruption exists, there is an “elite consensus” on graft, which means that leaders do not fight for the pie today because they know their turn will come with the next (democratic) election when they win power. Ghana is a good example here – there isn’t that overt looting of state coffers that you might see in other African countries, but you can still benefit illegally from public funds – if you play nicely.

The strong state in these countries also suggests that in order to be steal public money in this countries, you have to “formalise corruption”. In other words, because the state is strong, you have to use formal channels to enrich yourself – lobbying Parliament to make rules in your favour would work here. South Africa is the classic case here – Black Economic Empowerment (BEE), for example, was intended to reduce the economic disparity between racial groups entrenched during apartheid, but it has morphed into a vehicle for a few well-connected black businessmen to enrich themselves – this class of nouveau riche beneficiaries is disparagingly called “tender-preneurs”. But even that name suggests that to benefit from state largesse, you have to have a modicum of formality – you have to register a company, fill and submit tender forms, etc. In these countries, you can’t just ride roughshod into the Treasury.

How to win: Be literate, learn how to write a proposal, and know how to do cocktail chit-chat.

The Ones who Only Share among Themselves

In the top left quadrant are a number of countries that have a high level of state legitimacy – they score high in governance and fighting corruption – but they also have high competition between elites. Rwanda and Ethiopia show up here, two countries which have a military-turned-civilian regime in power. In Rwanda’s case it is the Rwanda Patriotic Front (RPF), while in Ethiopia’s case it is Ethiopian Peoples’ Revolutionary Democratic Front. In these countries, elections are not fiercely fought for across the board (the Parliamentary contest might be hot, but not that for president or prime minister) as it is almost taken for granted that the ruling party and/or its candidate will win.

So something else plays out here: internal competition within the party is intense, but you have to be “one of us” to be a legitimate player in the game. So we see these regimes coming down hard on “dissidents” because the game can only be played within the boundaries and uniformity of the ruling party. In Rwanda, for example, perhaps the reason openly gorging yourself from the public coffers is frowned upon here is because “everyone can’t do it” and it would make certain individuals stand out, not necessarily because it’s wrong. Liberia and Mauritania also feature here, but for different reasons: Liberia has a long history of a “ruling class”: Americo-Liberians, descendants of freed slaves, ruled the country exclusively since independence in 1847 until 1980, so to be in the game, you just had to be “one of them”. Mauritania also has a ruling class called the “white Moors”. So the elite can fight among themselves – Mauritania, for example, has  had a dozen coups or attempted coups since independence from France in 1960—but they firmly shut the door to outsiders.

How to win: Join the party, but always watch your back.

The Ones who Don’t Share

In the lower right quadrant are countries like Angola, Burkina Faso, Gabon, Republic of the Congo and Swaziland. They score low on competition among elites, but high on corruption. Why aren’t the elite fighting among themselves? Here, the reason for this disparity might be simple: the elite has entrenched themselves firmly into power, they have sunk their roots deep into the state system, and aren’t going anywhere. But there’s a difference between them and The Ones who Only Share among Themselves –the ruling class is small enough to keep “eating”, so there isn’t any need for competition within that small group. Swaziland is an absolute monarchy, so it perfectly embodies this “total exclusivity”.

Ruling elites here have a steady income supply, like oil (or royal tributes), to provide an endless bonanza – and it explains why most of them have had long regimes in power, twenty years or more: Jose Eduardo dos Santos in Angola, Blaise Compaore in Burkina Faso, the Bongo dynasty in Gabon, Denis Sassou-Nguesso (with a short interruption) in the Congo and King Mswati in Swaziland have all been in power for more than 20 years). There just isn’t any real competition; and luckily, the money is enough to keep everyone who matters happy. In Angola, for example, President Jose Eduardo dos Santos family controls practically all the major sectors of the economy: his daughter Isabel is famously Africa’s first female billionaire, with assets in telecoms, banking and diamonds; daughter Tchize runs a television and communications network; son Coreon Dú is a music producer and singer; and son José Filomeno heads the country’s sovereign wealth fund.

How to win: Marry into the family and live quietly.

The Free for All: “Democratically Corrupt”

In the lower left quadrant are the conflict-plagued states: Somalia, Sudan, South Sudan, others with widespread civil strife – such as Zimbabwe, Libya and Eritrea – as well as others which, on the surface, aren’t “quite so failed”- Kenya, Uganda, Cameroon and Nigeria. These countries have the bad scores, both in the level of corruption and in the factionalisation of elites. Corruption here isn’t exclusive to some long-established ruling elite, or to any formal party structure. Outsiders do have a chance of getting in, but there isn’t enough to go around – the elite is too large, and there are too many vested interests.

It means that elections tend to be a “winner-take-all” scenario, fiercely fought on the ground. Still, there’s a silver lining here: the fact that politicians are fighting for citizen’s votes suggests that votes actually count. But here, there isn’t really an expectation to play nicely, or share with others, so we see lots of rogue behaviour, elites tend to thrive on chaos and unpredictability. The weakness of the state gives rise to strong lawless groups – such as Boko Haram or al-Shabab – and the country is vulnerable to civil strife.

How to win: Be a bully, and never, ever show any weakness.

 

http://mgafrica.com/article/2014-10-09-the-four-africas

 

http://mgafrica.com/article/2014-10-09-the-four-africas/

Ethiopia Ranks 47th in Mo Ibrahim 2014 Governance Index Human Rights category October 1, 2014

Posted by OromianEconomist in Africa, Corruption, Ethiopia & World Press Index 2014, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, The 2014 Ibrahim Index of African Governance, Uncategorized.
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Ethiopia has been  ranked 47th out of 52 countries in Africa by the Mo Ibrahim 2014 governance index on Human Rights.  Ethiopia’s score in this category is 28.8/100.  Ethiopia (28.8), CAR (27.9), Gambia (26.2), Equatorial Guinea (10.5), Eritrea (8.6) and Somalia (7.3) are  the worst performing in this category. Ethiopia has been one of the most deteriorating trend for the  last five years with score for change of -6.3. Top 5 performing countries in this category are: Cabo Verde (84.4), Mauritius (81.7), Ghana (78.1), Senegal (74.7),  Namibia (73.3). Average African score for human rights category has been 49.4. The 2014 Ibrahim Index of African Governance, launched on  29 September 2014.

  See Chart @http://www.moibrahimfoundation.org/interact/#phr;root

In accountability which includes corruption in government and public officials, Ethiopia has  scored 38.9  and has been ranked 25th with deteriorating trends. The highest performing Botswana has scored 77.3. The average for all Africa is 38.9. See Chart @http://www.moibrahimfoundation.org/interact/#srl;root

Ethiopia ranks 32nd in over all Ibrahim Index of  2014 African Governance with score of  48.5/100. The top 5 scorers are Mauritius (81.7), Cabo Verde (76.6), Botswana (76.2),  South Africa (73.3) and Seychelles (73.2).

According to the Index,  governance is defined as:

“The provision of the political, social and economic goods that a citizen has the right to expect from his or her state, and that a state has the responsibility to deliver to its citizens.”

The foundation conducts its assessments with four main conceptual categories: Safety & rule of law,  participation and human rights,  sustainable economic opportunity and human development.

Read related analysis on the report @The Ibrahim Index and Africa’s new numbers: http://africanarguments.org/2014/10/01/africas-new-numbers-revealing-and-intriguing-by-richard-dowden/